Rupee’s Quiet Recovery Amid Trade Uncertainty

India’s rupee continued to display surprisingly stable behavior amid the latest global trade turbulence, reclaiming some ground after a brief depreciation. Regional currency weakness tied to elevated trade uncertainty dragged the rupee down initially, but steady inflows and a modest reversal in the dollar helped it recover slightly. The currency now hovers in a balanced range, offering a semblance of calm to importers and exporters.

Domestic forex traders have noted that foreign portfolio investors (FPIs) are increasingly active in equity markets, offsetting export-led dollar outflows. This dynamic is reinforcing a stable rupee, as the benefits of inflows are partially neutralizing external pressures. While the currency remains alert to the pace of U.S.–India trade negotiations and global liquidity flows, current levels reflect a cautious equilibrium between external pressure and internal support mechanisms.

Going forward, the rupee’s resilience may prove to be a buffer for India’s broader economic landscape. However, renewed tariff escalation from major economies or unexpected shifts in investment flows could challenge this stability in the near future.